--- Page 1 --- Wordcount: 1090 words Question 1 Trade-off developing countries like Vietnam might face is between economic growth and carbon emissions. As outlined in the article by The Economist, it can be a difficult choice for these countries or international organizations to decide whether to fund green initiatives or projects that address basic needs like healthcare and education. Secondly, as pointed out by Bui Minh et al. (2023), foreign direct investment and population growth have causal relationships with CO2 emissions in Vietnam. This further strengthens the argument that urbanization, while improving the living quality of people, also leads to increased carbon emissions. Despite these trade-offs, the country does have policies and initiatives that aim to balance GDP growth and carbon emissions: Renewable energy: A significant policy is Decision No. 500/QD-TTg, enacted in May 2023 by the Prime Minister, which sanctions the National Power Development Master Plan for 2021-2030, with a long-term vision to 2050. This plan aims for an annual GDP growth of approximately 6.5% to 7%, alongside a boost in renewable energy usage. The government has particularly set a goal for 47% of Vietnam''''s electricity consumption to be sourced from renewables by 2030. Greenhouse Gas Trading: Although reducing greenhouse gas emissions from large corporations (responsible for a significant proportion of greenhouse gases) is crucial, immediate emission cuts could negatively impact production and output, which contribute to the nation''''s GDP. Therefore, the government has decided to conduct mandatory greenhouse gas inventories, allocate carbon quotas, and develop a carbon credit market. This incentivizes low-emission facilities, as established in Decree 06/2022/ND-CP, signed in 2022, which regulates emission reductions to mitigate greenhouse gas emissions and protect the ozone layer. Question 2 For this analysis, we utilized data on coffee and rice production in both countries from 2019 to 2023, retrieved from the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (FAS 2024). The data would be presented in the following tables: Figure 1: Rice and Corn Production in Vietnam (million metric tons) Figure 1: Rice and Corn Production in USA (million metric tons) The figure above demonstrates that Vietnam has an absolute advantage over the USA in producing rice while the USA have an absolute advantage in cultivating corn. To evaluate the comparative advantage of products between the two countries, let''''s assume that each country has limited resources and labor to produce two goods, specifically rice and corn. An increase in the production of one product will consequently lead to a decrease in the production of the other. In essence, both countries must decide between producing more rice or more corn, facing a trade-off situation. Figure 3: Vietnam production opportunity cost Figure 4: USA production opportunity cost As derived from the table above, Vietnam has a higher opportunity cost of producing corn compared to the USA. Vietnam must sacrifice approximately 5.7 to 6.2 million metric tons of rice to produce 1 metric ton of corn, while the USA sacrifices less than 0.02 million metric tons of rice for the same amount of corn over the five-year period, indicating that the USA has a comparative advantage in corn production. This advantage can be attributed to the suitable climate and soil environment in the fertile land of its Midwest region, known as the Corn Belt, as well as the implementation of advanced farming practices that yield higher production (Clampitt 2015). --- Page 2 --- On the other hand, Vietnam seems to have a comparative advantage in producing rice. In this case, Vietnam has a lower opportunity cost of producing rice than the USA. In the tables above, while the USA has to sacrifice more than 50 million metric tons of corn for most of the period, Vietnam only has to sacrifice less than 0.18 million metric tons of corn to produce the same amount of rice. Contributing reasons for this could be that Vietnam is a tropical country with high rainfall and has several fertile deltas, like the Mekong Delta, that provide suitable cultivating conditions for rice (Xuan 1995). Question 3 According to the company’s website, Nutifood Nutrition Food Joint Stock Company is a dairy manufacturing company with its main product focusing on formula milk for infants and young children. This analysis focuses on two events: the decrease in raw material costs for dairy production and the expected high birth rate in 2024. It is important to note that due to limited data availability, this analysis presents the effects of the events using illustrative diagrams with symbols, rather than detailed figures with precise numerical values. Decrease in raw material costs: According to Quang (2024), the prices of raw materials for milk production, which are whole milk powder and skim milk powder, have reached their lowest point in the past five years. With this decreasing raw material, which are needed for the production of formula milk, we also expect a change in the supply and demand curve of the formula milk market as follow: Figure 5: Supply curve shift due to increase in production cost In this case, as the price of raw materials drops, the supply curve shifts to the right (from Supply to Supply*), leading to a lower equilibrium price (from P1 to P2). In this scenario, the quantity being traded increases from Q1 to Q2. Expected high birth rate: In 2024, the birth rate is anticipated to rise. According to the Lunar calendar, 2024 marks the Year of the Wood Dragon, and many people in Vietnam and other Asian countries hold the belief that children born during this year will enjoy strength, prosperity, and happiness in their future. Ngân (2024) reports that in Vietnam, during the first three days of the Wood Dragon year, 7,680 babies were born, reflecting a 9.6% increase compared to the same period the previous year. As most of Nutifood''''s formula milk is consumed by infants and children, this increase in newborns in the country may drive up demand for the product, as follows: Figure 6: Demand curve shift due to increase birth rate In this case, the demand curve shifts rightward (from Demand to Demand*), which leads to a higher equilibrium price (from P2 to P3) and a higher equilibrium quantity (from Q2 to Q3). References: Bui Minh T, Nguyen Ngoc T and Bui Van H (2023) ''''Relationship between carbon emissions, economic growth, renewable energy consumption, foreign direct investment, and urban population in Vietnam'''', Heliyon, 9:e17544, doi:10.1016/j.heliyon.2023.e17544. Clampitt C (2015) Midwest Maize: How Corn Shaped the U.S. Heartland, University of Illinois Press, doi:http://www.jstor.org/stable/10.5406/j.ctt130jtgd. FAS (2024) Global Production, Foreign Agricultural Service (FAS) website, accessed 28 July 2024. https://fas.usda.gov/data/production Ngân N (12 February 2024) ''''Cả nước đón 7.680 công dân chào đời trong 3 ngày Tết Giáp Thìn 2024'''', Công Thương, accessed 28 July 2024. https://congthuong.vn/ca-nuoc-don-7680-cong-dan-chao-doi-trong-3-ngay-tet-giap-thin-2024-303083.html
Trang 1Wordcount: 1090 words
I Question 1
Trade-off developing countries like Vietnam might face is between economic growth and carbon emissions As outlined in the article by The Economist, it can be a difficult choice for these countries or international organizations to decide whether to fund green initiatives or projects that address basic needs like healthcare and education Secondly, as pointed out by Bui Minh et
al (2023), foreign direct investment and population growth have causal relationships with CO2 emissions in Vietnam This further strengthens the argument that urbanization, while improving the living quality of people, also leads to increased carbon emissions
Despite these trade-offs, the country does have policies and initiatives that aim to balance GDP growth and carbon emissions:
1 Renewable energy: A significant policy is Decision No 500/QD-TTg, enacted in May
2023 by the Prime Minister, which sanctions the National Power Development Master Plan for 2021-2030, with a long-term vision to 2050 This plan aims for an annual GDP growth of approximately 6.5% to 7%, alongside a boost in renewable energy usage The government has particularly set a goal for 47% of Vietnam's electricity consumption to be sourced from renewables by 2030
2 Greenhouse Gas Trading: Although reducing greenhouse gas emissions from large
corporations (responsible for a significant proportion of greenhouse gases) is crucial, immediate emission cuts could negatively impact production and output, which contribute to the nation's GDP Therefore, the government has decided to conduct mandatory greenhouse gas inventories, allocate carbon quotas, and develop a carbon credit market This incentivizes low-emission facilities, as established in Decree 06/2022/ ND-CP, signed in 2022, which regulates emission reductions to mitigate greenhouse gas emissions and protect the ozone layer
Trang 2II Question 2
For this analysis, we utilized data on coffee and rice production in both countries from 2019 to
2023, retrieved from the Foreign Agricultural Service (FAS) of the U.S Department of Agriculture (FAS 2024) The data would be presented in the following tables:
26,200,000
26,400,000
26,600,000
26,800,000
27,000,000
27,200,000
27,400,000
27,600,000
4,100,000 4,200,000 4,300,000 4,400,000 4,500,000 4,600,000 4,700,000 4,800,000
Vietnam
Rice Production Corn Production
Figure 1: Rice and Corn Production in Vietnam (million metric tons)
Trang 320190 2020 2021 2022 2023
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
320,000,000 330,000,000 340,000,000 350,000,000 360,000,000 370,000,000 380,000,000 390,000,000 400,000,000
USA
Rice Production Corn Production
Figure 1: Rice and Corn Production in USA (million metric tons)
The figure above demonstrates that Vietnam has an absolute advantage over the USA in producing rice while the USA have an absolute advantage in cultivating corn
To evaluate the comparative advantage of products between the two countries, let's assume that each country has limited resources and labor to produce two goods, specifically rice and corn
An increase in the production of one product will consequently lead to a decrease in the production of the other In essence, both countries must decide between producing more rice or more corn, facing a trade-off situation
Opportunity cost of
producing corn (rice metric
tons)
5.7659574
5
5.9565217
4
6.0681818
2
6.1136363
6
6.2790697
7
Opportunity cost of
producing rice (corn metric
tons)
0.1734317
3
0.1678832
1
0.1647940
1
0.1635687
7
0.1592592
6
Figure 3: Vietnam production opportunity cost
Trang 42019 2020 2021 2022 2023 Opportunity cost of
producing corn (rice metric
Opportunity cost of
producing rice (corn metric
Figure 4: USA production opportunity cost
As derived from the table above, Vietnam has a higher opportunity cost of producing corn compared to the USA Vietnam must sacrifice approximately 5.7 to 6.2 million metric tons of rice to produce 1 metric ton of corn, while the USA sacrifices less than 0.02 million metric tons
of rice for the same amount of corn over the five-year period, indicating that the USA has a comparative advantage in corn production This advantage can be attributed to the suitable climate and soil environment in the fertile land of its Midwest region, known as the Corn Belt, as well as the implementation of advanced farming practices that yield higher production (Clampitt 2015)
On the other hand, Vietnam seems to have a comparative advantage in producing rice In this case, Vietnam has a lower opportunity cost of producing rice than the USA In the tables above, while the USA has to sacrifice more than 50 million metric tons of corn for most of the period, Vietnam only has to sacrifice less than 0.18 million metric tons of corn to produce the same amount of rice Contributing reasons for this could be that Vietnam is a tropical country with high rainfall and has several fertile deltas, like the Mekong Delta, that provide suitable cultivating conditions for rice (Xuan 1995)
III Question 3
According to the company’s website, Nutifood Nutrition Food Joint Stock Company is a dairy manufacturing company with its main product focusing on formula milk for infants and young children This analysis focuses on two events: the decrease in raw material costs for dairy production and the expected high birth rate in 2024 It is important to note that due to limited
Trang 5data availability, this analysis presents the effects of the events using illustrative diagrams with symbols, rather than detailed figures with precise numerical values
Decrease in raw material costs:
According to Quang (2024), the prices of raw materials for milk production, which are whole milk powder and skim milk powder, have reached their lowest point in the past five years With this decreasing raw material, which are needed for the production of formula milk, we also expect a change in the supply and demand curve of the formula milk market as follow:
Figure 5: Supply curve shift due to increase in production cost
In this case, as the price of raw materials drops, the supply curve shifts to the right (from Supply
to Supply*), leading to a lower equilibrium price (from P1 to P2) In this scenario, the quantity being traded increases from Q1 to Q2
Trang 6Expected high birth rate:
In 2024, the birth rate is anticipated to rise According to the Lunar calendar, 2024 marks the Year of the Wood Dragon, and many people in Vietnam and other Asian countries hold the belief that children born during this year will enjoy strength, prosperity, and happiness in their future Ngân (2024) reports that in Vietnam, during the first three days of the Wood Dragon year, 7,680 babies were born, reflecting a 9.6% increase compared to the same period the previous year
As most of Nutifood's formula milk is consumed by infants and children, this increase in newborns in the country may drive up demand for the product, as follows:
Figure 6: Demand curve shift due to increase birth rate
In this case, the demand curve shifts rightward (from Demand to Demand*), which leads to a higher equilibrium price (from P2 to P3) and a higher equilibrium quantity (from Q2 to Q3)
Trang 7Bui Minh T, Nguyen Ngoc T and Bui Van H (2023) 'Relationship between carbon emissions, economic growth, renewable energy consumption, foreign direct investment, and urban
population in Vietnam', Heliyon, 9:e17544, doi:10.1016/j.heliyon.2023.e17544.
Clampitt C (2015) Midwest Maize: How Corn Shaped the U.S Heartland, University of Illinois
Press, doi:http://www.jstor.org/stable/10.5406/j.ctt130jtgd
FAS (2024) Global Production, Foreign Agricultural Service (FAS) website, accessed 28 July
2024 https://fas.usda.gov/data/production
Ngân N (12 February 2024) 'Cả nước đón 7.680 công dân chào đời trong 3 ngày Tết Giáp Thìn
2024', Công Thương, accessed 28 July 2024
https://congthuong.vn/ca-nuoc-don-7680-cong-dan-chao-doi-trong-3-ngay-tet-giap-thin-2024-303083.html
Quang D (12 February 2024) 'Vinamilk (VNM): Giá nguyên liệu đầu vào ở mức thấp nhất 5
năm, tự tin về kết quả quý 1', Tạp chí Công thương, accessed 28 July 2024.
https://tapchicongthuong.vn/vinamilk vnm-gia-nguyen-lieu-dau-vao-o-muc-thap-nhat-5-nam tu-tin-ve-ket-qua-quy-1-116848.htm
Xuan TV (1995) 'Rice Production, Agricultural Research, and the Environment' Vietnam's Rural
Transformation, 1th edn, Taylor & , New York.